Application of Selected Machine Learning Methods to Companies’ Insolvency Prediction
Application of Selected Machine Learning Methods to Companies’ Insolvency Prediction

Author(s): Joanna Wyrobek
Subject(s): Business Economy / Management, Methodology and research technology, Transformation Period (1990 - 2010), Present Times (2010 - today)
Published by: Masarykova univerzita nakladatelství
Keywords: machine learning; bankruptcy prediction; corporate finance;
Summary/Abstract: The purpose of the paper was to test the efficiency of various modern machine learning methods on the representative sample of Polish companies for the time period 2008 – 2017. The novelty factor in the paper is that it uses a representative sample of companies, which seems to improve the efficiency of the models and that the training sample and the validation sample include data from different time periods and different companies (the training sample data covered the period of 2008 – 2013 and the validation sample covered the period 2014 – 217). The hypothesis verified in the paper is [H1] that: the most efficient algorithms in bankruptcy prediction are: Gradient Boosting Decision Trees and Random Decision Forest.

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